Bitcoin for beginnersBitcoin for beginners

Bitcoin is digital money that works without a bank or central administrator. Its creator, Satoshi Nakamoto, described bitcoin as a way to send online payments directly from one person to another, without a financial institution in between.

You can compare bitcoin to cash. If you hand someone a tenner, they have it straight away. There's no bank needed to process or approve the payment.

Bitcoin follows the same idea, but digitally. Bitcoin transactions happen peer-to-peer: from person to person. You send bitcoin directly to the recipient, without a bank or payment company having to process or approve the transaction.

How does Bitcoin work?

Bitcoin works without a bank or central administrator. Instead, the network runs on thousands of computers all over the world.

When you send bitcoin, that transaction is shared with the network. Together, those computers check whether transactions meet Bitcoin's rules. For example, whether you can actually spend the bitcoin you want to send.

Approved transactions are collected in a block. That block is added to the blockchain: a shared, public record in which all bitcoin transactions are logged. You can think of the blockchain as a shared ledger that everyone can view, but no one can simply change.

Each new block is linked to the previous one. This creates a chain of blocks that is practically impossible to change. Once confirmed, a payment therefore can't simply be reversed. This prevents the same bitcoin from being spent twice, for example.

This is how the Bitcoin network can work reliably, without a bank having to process or approve the payment.

How do you get bitcoin?

There are a few ways to get bitcoin. For most people, buying is the easiest and fastest route.

Buying bitcoin
You buy bitcoin from a crypto provider, such as BTC Direct. You simply pay in euros, for example via iDEAL or a bank transfer. The bitcoin then ends up in your wallet. By the way, you don't have to buy a whole bitcoin. A small part is fine too.

Receiving bitcoin
You can also receive bitcoin from someone else. For example as payment for a product or service, or when someone transfers bitcoin to you. The other person then sends the bitcoin to your wallet address.

Mining bitcoin
New bitcoin comes into circulation through mining. Miners use computers to process transactions and add new blocks to the blockchain. As a reward, they receive bitcoin. Mining takes a lot of computing power and electricity. For beginners it's therefore usually not a handy way to get bitcoin.

Want to get started? Then buying is usually the easiest first step. Further down we explain exactly how that works.

What can you do with bitcoin?

Paying
More and more shops and services accept bitcoin as a means of payment, from local cafés and restaurants to large webshops. You then pay directly from your wallet.

Sending money abroad
An ordinary international transfer sometimes takes days. With bitcoin you send money a lot faster, including abroad. All you need is the other person's wallet address. The speed and costs depend on how busy the network is.

Holding bitcoin for the long term
The maximum supply of bitcoin is fixed at 21 million. There will never be more. That makes bitcoin scarce. This is why many people hold bitcoin as part of their wealth. Do keep in mind that the value of bitcoin can fluctuate strongly. Never invest more than you can afford to lose.

How do you store your bitcoins safely?

You store bitcoin with a wallet. That's a digital wallet you use to receive, store and send bitcoin.

Technically, a wallet doesn't literally store your bitcoin, but the access to your bitcoin on the blockchain.

There are different types of wallets:

• Software wallet, an app on your phone or computer. Handy for small amounts and everyday use.
• Hardware wallet, a physical device that keeps your access offline. The safest option for larger amounts.

The most important thing is that you keep your recovery phrase or private key well protected. That's the access to your bitcoin. Never share it with anyone and don't just store it online. Whoever has your recovery phrase can access your bitcoin.

Choose a wallet that suits how you use bitcoin. For small amounts a software wallet can be enough. For the long term, many people choose extra security with a hardware wallet.

Read more about bitcoin wallets

Buying bitcoin through BTC Direct is simple. You choose yourself how much you want to buy and simply pay in euros.

1. Create an account
Open a free account with your email address and choose a password. Then verify your details.

2. Choose your order amount
Choose how much bitcoin you want to buy. You can start from as little as €30.

3. Pay and receive your bitcoin
Pay via iDEAL, bank transfer, credit card or another payment method. After your purchase we send the bitcoin to your wallet address. BTC Direct does not store your bitcoin for you.

Open a free account